Human Resources

The Great Generational Shift: How Employers and Managers Can Prepare

While there are always different people of different generations working side by side in the workplace, today there are as many as six different generations, depending on which demographic definitions one uses. The workforce is aging on one end of the spectrum and getting younger on the other. In the middle there is a gap, with the prime age workforce shrinking as an overall percentage of the workforce.

The oldest, most experienced people in the workplace, “pre-Boomers,” those born before the post-WWII “Baby Boom” began in 1946, are still greater than 1% of the workforce. The Baby Boomers (born 1946-64) are 30%, Generation Xers (born 1965-77) are 27%, and The Millennial Generation is 42%.

Because both the Baby Boomers and the Millennials are such large generations with such long birth-year time spans by the broadest definitions, we have found it useful to split them each into first-wave and second-wave cohorts. Based on our model, here is a chart of the generations in the workplace today:

Source: Rainmaker Thinking

On the older end of the generational spectrum, the workforce is aging, just as the overall population is aging. This is particularly notable in Japan, most of Europe, and North America. The Boomers are filling up an “age bubble” in the workforce such that there are many more people at or near the ordinary age range for retirement. The exodus of the first-wave Boomers from the workplace – postponed for several years by the economic crisis that began in 2008 – is now swift and steady.

At the same time, the fastest growing segment of the workforce is made up of those born 1990 and later, so there is a growing youth bubble on the younger end of the spectrum. The youth bubble in the workforce is rising much faster than in recent years because employers are once again hiring new young workers after several years of formal and informal hiring freezes resulting from the economic crisis.

By the year 2020, the Western workforce will be made up of less than 20% Baby Boomers and more than 20% second-wave Millennials, (plus another 4 – 5% of post-Millennials).

What Does the Generational Shift Mean for Employers?

As the aging Baby Boomers exit the workforce, they will take with them a great deal of skill, knowledge, wisdom, institutional memory, relationships, and the last vestiges of the old-fashioned work ethic.Organizations with significant “age bubbles” in their employee demographics will be facing these losses and cascading consequences as their aging workers leave the workforce. This will require HR to dedicate substantial resources to support knowledge-transfer and what we call “wisdom transfer”.

As the global youth tide continues to rise, the new young workforce will bring a whole new set of expectations and behavior that takes for granted the short-term transactional nature of employment. Organizations that rely disproportionately upon young workers have a permanent “youth bubble” in their employee demographics. Such organizations will be facing the challenges of an increasingly high-maintenance workforce in which employees will not hesitate to make suggestions, special requests, and demands – in particular related to rewards and flexible work conditions. This will require dedicating substantial resources to staffing strategy, attraction, selection, on-boarding, training, performance management, accountability, differential rewards, and retention.

Employers will face perpetual staffing shortages.The pressure to get more and more work out of fewer and fewer people means staying lean staffed, always. At the same time, the rising demand for high-skilled labor – especially in the STEM (Science, Technology, Engineering, and Math) fields – promises ongoing staffing shortages and technical skill gaps. Employers in every industry will be struggling to attract, motivate, and retain the best talent.

The successful organization will have as many different career paths as it has people. Flexible work conditions, learning/knowledge management, pay-for-performance, and coaching-style leadership will be the keys to being an “employer of choice” for in-demand talent. The ability to get people on board, up to speed, and delivering results quickly will be the key to most staffing challenges.

What Does the Generational Shift Mean for Leaders, Managers, and Supervisors?

Managing people is going to keep getting harder. It has always been hard to manage people, but it’s going to get harder as the workplace becomes more and more high- pressure and the post-Boomer workforce becomes more and more high-maintenance.

High-maintenance workforce. Managers will need to deal with and accommodate the growing needs and expectations of an increasingly diverse post-Boomer workforce. Workers of all ages today rely every day on their immediate managers for help meeting their basic needs and expectations and dealing with a whole range of day-to-day issues that arise at work. Millennials are the most likely to make specific requests regarding work conditions including the assignment of tasks, resource planning, problem solving, training, scheduling, work location, work space, dispute resolution, guidance, coaching, recognition, promotions, raises, benefits and other rewards.

To be effective in today’s environment, managers must be strong and highly-engaged. Highly-engaged means conducting ongoing structured communication to provide every worker with regular guidance, direction, support and coaching. Strong means finding ways to do more for workers when they really earn it. That means doing more for some workers and less for others, based on their performance. That means holding people strictly accountable on a daily basis: Setting expectations clearly, providing candid feedback, correcting problems, rewarding good work, and especially rewarding discretionary effort.

Share this article

Bruce Tulgan

About the Author

Bruce Tulgan is an adviser to business leaders all over the world and a sought-after keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerThinking.Training, an online training company.